Michael Bay: Making Movies, Enemies and Money

At the White Sands Missile Range in New Mexico, the sun can burn your skin in a quarter of an hour. The film crew of Transformers: Revenge of the Fallen, who have turned this unearthly landscape into a partially destroyed Egyptian village, are covered head to toe in floppy hats, long-sleeved shirts and boots to protect themselves. But not director Michael Bay. He leaps around the set like a little kid, in a short-sleeved Polo shirt.

"Fire in the hole!" An explosion goes off next to a crumbling house. Bay grins approvingly and darts to some fake rocks where stars Shia LaBeouf and Megan Fox are cowering in the face of yet another attack by robots from outer space. Over the course of the day Bay will film 63 shots, three times as many as on most sets. "I hear stories about directors waiting eight hours to shoot," says Bay. "How can your game plan be so screwed up? If I ran a studio, I'd fire your ass."

As well known for his blowups on the set as he is for explosions on the screen, Bay has made his share of enemies. One actor who worked as an extra on Pearl Harbor recalls how Bay accused another actor of thinking the attack on Pearl Harbor was funny when someone laughed after hours of sitting for a take. An executive says Bay got so enraged at an extra on the set of Transformers that he made him stand in a corner. Actress Kate Beckinsale told reporters Bay made her feel ugly on the set of Pearl Harbor. (Not true, says Bay. He asked her to work out more.) Bay is known for sometimes clashing with stars on the set, such as Bruce Willis in the 1998 film Armageddon. "He has a tendency to try to be a director and change actors' lines," says Bay. "I don't think Bruce liked that I had a pair of balls." He takes a similarly defensive stand toward the critics who have called his films "vile," "brain dead" and "pandering."

But audiences love him. Bay's seven movies have pulled in $2.6 billion at the box office, putting him in the same league with James Cameron ($3 billion, including Titanic, the highest-grossing film ever, at $1.8 billion). That means something at a time when the movie business is going through its own action thriller, as studios run low on capital and people stop buying DVDs. (Although theaters keep half of ticket sales, the gross amount is a good proxy for the movie owner's total revenue, which includes DVDs and other money streams.)

Bay brings his movies in on time and on budget, a rarity in Hollywood. Because his pay is largely based on the film's profits (usually one-third of the take after the studio recoups its production and advertising costs), he's got plenty of incentive to rein in expenses. "Michael makes me look good because he counts every penny," says Jerry Bruckheimer, who has produced five of Bay's films.

The new Transformers movie (the second full-length feature in the series) cost $195 million to make. But Bay estimates it would have cost $10 million more if he hadn't partnered with
General Motors
and the U.S. military to get free cars, helicopters and battleships. By keeping the budget (relatively) low on the first Transformers flick, in 2007, he was able to increase his share of the movie's $708 million worldwide gross, earning $80 million from the film. So what if those product placements make his movies look like long commercials? "People say it's whoring out, but it's not," says Bay, 44. "Advertising is in our lives. It's unavoidable. To think you can't have it in a movie isn't real life."

One of his first jobs out of school (he majored in film and English at Wesleyan University) was directing commercials. By the time he was 26 Bay had created ads for Coke, Levi's and Budweiser and a memorable Chevy ad showing a new line of cars being released into the wild. He learned everything on the job--rigging lights, focusing a lens, ordering around big egos like the professional athletes he shot in his
Nike
ads.

Bruckheimer offered Bay his first directing job in 1994 on Bad Boys, a movie about two Miami cops chasing drug thieves. A great break, except the script was so bad that Bruckheimer's partner, Don Simpson, threatened to take their names off the movie before the first shot. Bay sat down with his stars, Will Smith and Martin Lawrence, and hammered out some bits to make the movie funnier and started shooting. "We had no support from the studio," says Bay in his airy Santa Monica office. "I wanted to make it exciting enough that it would make its money back." In one of the last scenes, Smith was supposed to punch out the bad guy. But the day of the shoot was rained out, and there wasn't enough money to bring back the crew. So Bay put up $25,000 of his $125,000 fee to shoot the scene. The movie, made for $20 million or so, went on to bring in $140 million at the box office globally.

"I didn't get points on that," says Bay, referring to the chunk of the profits big players get from a movie. "I had to beg to even get my [$25,000] back." The experience made Bay smarter about negotiating deals. He took fees on his next two films, The Rock and Armageddon, but by 2000 he decided he wanted to be more than a director for hire and insisted on part ownership. For Pearl Harbor, a $140 million (production cost) movie, he declined upfront pay in favor of a 50% split of what remained after the studio recouped production and advertising costs. The film grossed $450 million; Bay pocketed $40 million. He leaned on the military, saving untold millions by using World War II-era aircraft carriers and battleships.

On the Transformers set in New Mexico, a handful of military personnel stand by at all times to help Bay strategize his attack scenes. "We need to see a commitment from the filmmaker that it's going to look real," says Lieutenant Colonel Gregory Bishop, the U.S. Army's entertainment liaison. "Fighting alien robots isn't realistic, but if we did fight alien robots, this is the way we'd do it." Bay's deal: free tanks, Humvees and rocket launchers as long as they're being used in training exercises. If soldiers are training on an
Apache
helicopter, Bay can film it for free. Because the Transformer robots turn into cars, Bay was also able to get freebies from GM--as he had earlier, when the auto company contributed flood-damaged cars for Bad Boys. "I gave them glorious deaths," says the director.

Bay has developed an equally strong relationship with
Hasbro
, the maker of Transformer toys. At first Bay wasn't sure about the idea: Would it be live action? Animation? What about fans who were sure to criticize every little decision? He was convinced by a trip to Hasbro headquarters in Rhode Island, where he was educated in the complicated mythology of the battle between the Autobots and the Decepticons. "He had this idea that everything is more than meets the eye," says Brian Goldner, Hasbro's chief executive. "You could look at almost any vehicle and believe there's a sentient being under there." Bay certainly believed the payback. His deal with Hasbro is second only to that of George Lucas, who gets an estimated 15% royalty on all Star Wars figures. Bay gets an estimated 8% on Transformer toys tied to movies.

He has also brought his common touch to small horror movies and, soon, videogames. In 2003 he launched Platinum Dunes, a production company that specializes in revamping 1970s classics like The Texas Chain Saw Massacre and The Amityville Horror. Bay hires young directors, who make the films for under $20 million each. Most earn back their budgets on opening weekend. As the producer, Bay gets an average 8% of the studio's net on each film.

Then there's Digital Domain, a visual-effects house started by James Cameron that Bay bought in 2007 with his business partner, John Textor. The company had fallen on hard times because of executive infighting, so they were able to pick it up for $35 million. Textor hired several effects wizards from George Lucas' Industrial Light & Magic with the idea of producing superrealistic videogames. Digital Domain broke new ground last year with the Oscar-winning special effects in The Curious Case of Benjamin Button.

Bay sees a day when videogames will be stored on servers, instead of played on home consoles, to offer theater-quality visual effects. "The game companies want directors to work for them, but they don't want to pay them," he complains. "We want to make it more like a movie studio--where everyone gets a piece of the action." That's how to get more action.

BOFFO BUCKS

He may not win the critics' hearts, but Michael Bay knows how to pack the theaters. Here's how his movies have done.